Hours worked growing more slowly than rise in employment: Why?
Ottawa, ON -- Between 2000 and 2003, the average annual number hours of work, as estimated by Statistics Canada's L...
Ottawa, ON — Between 2000 and 2003, the average annual number hours of work, as estimated by Statistics Canada’s Labour Force Survey (LFS), gradually declined by 70 hours, which is the equivalent of two weeks of work or 1.4 hours per week per worker.
This decline was surprising since employment continued to be uncommonly strong despite slower economic growth than in the late 1990s.
In fact, between 2000 and 2004, employment increased 8.1%, while the number of hours worked rose only 4.3%. Such a differential was unprecedented.
This new study found that survey methodology accounted for more than half of the decrease in hours of work. But other factors included the aging of the work force, as well as employees who generally were seeking a better balance between work and personal life.
In terms of methodology, the under-representation of some statutory holidays led to an overestimation of average annual hours worked in 2000, and thus by comparison an exaggerated drop in hours during the following three years. Similar patterns have occurred previously, notably between 1989 and 1992.
Once adjusted to eliminate the statutory holiday bias, the decline amounted to an average of one week annually per employee instead of two. Two-thirds of the decrease in adjusted hours came from an increase in hours lost for other than statutory holidays.
This increase in hours lost was attributable to the aging of the work force, since a major portion of the increase occurred among workers aged 45 and over.
Other contributing factors were an increase in time off for vacation and for personal or family responsibilities, as well as changes to Employment Insurance that resulted in more weeks of maternity, parental and adoption benefits as of December 31, 2000. This reflected the greater value assigned to a better balance between work and personal life.
The increased propensity to work part time, which was more pronounced among men in all age groups, also reinforced this trend.
In addition, 2003 was disrupted by several events: the August power blackout in Ontario, concerns about a possible SARS epidemic, and forest fires and floods in British Columbia.
Combined with the substantial appreciation of the Canadian dollar, these events led to an increase in work absences for other reasons, which accounted for nearly one-fifth of the total increase in hours lost.
While the average workweek has decreased, the decrease is exaggerated because the LFS estimate of hours actually worked often introduces a bias that can distort interpretation of labour market conditions.
A comprehensive adjustment is produced regularly at Statistics Canada in the Canadian Productivity Accounts program. The Current Population Survey, the U.S. counterpart of Canada’s LFS, uses virtually identical procedures, so their estimates also contain a reference-week bias.
On the other hand, new labour force surveys in the European Union gather data weekly from reduced samples, thus nullifying this bias.
The article “Whither the workweek?” is available at www.statcan.com in the June 2005 online edition of Perspectives on Labour and Income, Vol. 6, no. 6 (75-001-XIE, $6/$52).